A group of four young entrepreneurs have bet their fortunes on the lucrative real estate sector, creating a 30-home multi-million development, Sigona Valley, as an exclusive gated community located in a serene environment in West Nairobi.

In their late 20s, Kiminiti Wanjari, Ian Kahara, Thomas Koigi and Johnson Waweru, proprietors of Serene Valley Properties Limited launched Sigona Valley in March 2012, and have since sold 50 per cent of the homes (Through HassConsult), having raised secure non-bank, development finance to fund their project.

“One day as we sat talking, an idea took us that we need to defy the odds of employment and get into investment. Real estate was the boom, and we bought the idea,” Mr. Kimiti Wanjaria, Director, Serene Valley Properties Limited, the developer of Sigona Valley said at the ground breaking ceremony of Sigona Valley.

The company today held a groundbreaking ceremony on the homes which they say will be complete from May to August 2013.

Funding difficulty

“We approached 12 separate banks, all of which refused to support the project. They focused on our own early-stage career profiles, and the assets we had already accumulated, rather than the project itself.” said Mr. Kimiti.

It was then that the four approached development funders for construction financing. These financiers are charged with promoting national development through funding private initiatives.

“The DFI was majorly concerned with the fundamentals of the project, its viability and the selected consulting team,” said Mr. Kimiti.

"We only tried a different approach, moving on to the funds with development funding for private sector real estate. Development funding, by its very criteria, is designed to back private sector projects that will accelerate the country's growth, development and prosperity, and many now have lines built for real estate development, in a country with still severe housing shortages and quality issues." He said.

Development funding groups, he added, are more concerned with the fundamentals of the project and its viability and with the company's first development funding application they won 60% project funding, with the requirement that the investors cater for 40%. They did so by putting in the land as their own equity and working with HassConsult as the exclusive sales consultant, selling on the off-plan selling model.

“Real estate investment is mainly occupied by those with accumulated savings or investment seeking institutions, but youth have a wide range of opportunities they can exploit,” said Ms Carol Kariuki, the Managing Director of The Mortgage Company at the event.

At Sigona Valley, the young investors have priced the houses to attract the middle-income market segment. The development is offering 3 and 4 bedroom villas in three different house designs for between Sh12m and Sh16m, in a tranquil gated community set on 4 acres, a stone's throw from Waiyaki Way and 5km from Sigona Golf Club.

Each of the 30 homes sit on approximately 1/10th of an acre with access to community facilities such as borehole water supply, solar hot water heating, waste water recycling and secured boundary walling. The Sigona Valley development is costing the investors Sh350m.